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North Carolina Subrogation Laws
Sections
State Subrogation
Made Whole Doctrine
Common Fund
Collateral Source Rules
Hospital Lien Act
Medicaid Statute
State Subrogation
NO – 11 N.C. Admin. Code 12.0319 prohibits subrogation provisions in insurance contracts. Equitable subrogation is probably allowed but the law is not entirely clear on this.
Made Whole Doctrine
N/A
Common Fund
N/A (accepted in other contexts)
Collateral Source Rules
Evidence offered to prove past medical expenses shall be limited to evidence of amounts actually paid – NC Gen Stat Ann 8C-1, 414.
Hospital Lien Act
- N.C. Gen. Stat. §44-49: Hospital is entitled to a lien, must provide an itemized statement and written notice to the attorney
- N.C. Gen. Stat. §44-50: When funds are awarded, the person shall retain out of any recovery a sufficient amount to pay the claims for any drugs, medical supplies, and services. The lien shall in no case, exclusive of attorney’s fees, exceed 50% of the amount of damages recovered
- Attorney’s fees can be deducted first, and then the remaining gets distributed between injured person and lienholder (North Carolina Baptist Hospitals, Inc. v. Mitchell, 362 S.E.2d 841 (N.C. Ct. App. 1987))
Medicaid Statute
- N.C. Gen. Stat. §108A-57: the state is subrogated to all rights of recovery
- Cap: If the amount of the Medicaid claim does not exceed 1/3 of the gross recovery, it is presumed that the gross recovery includes compensation for the full amount of the Medicaid claim. If the amount of the Medicaid claim exceeds 1/3 of the gross recovery, it is presumed that 1/3 of the gross recovery represents compensation for the Medicaid claim
- A medical assistance beneficiary may dispute the presumptions in court. An evidentiary hearing will be held:
- Beneficiary has the burden of proving by clear and convincing evidence that the portion of the gross recovery that represents compensation for the Medicaid claim is less than the portion presumed
- Beneficiary must disclose to the department when there is a potentially liable third party
- Previous version of the statute must have mentioned that the attorney’s fee shall not exceed 1/3 of the amount recovered to which the right of subrogation applies (See North Carolina Dept. of Human Resources, Div. of Medical Assistance v. Weaver, 466 S.E.2d 717 (N.C. Ct. App. 1996)) There are no more recent cases that help clarify this issue as to how the statute currently reads. There are no mentions of attorney’s fees in the statute.